Getting Ready for Sequestration: BU Already Tightening the Belt

How will sequestration affect research at Boston University? The School of Medicine already is taking a 10 percent haircut on some federal grants that were promised, but are being withheld, forcing some lab staff layoffs. David Coleman, a MED professor and chair of the department of medicine, fears a slowdown in its studies of how a variety of diseases work, with delayed hires and cuts in equipment purchases.

On the Charles River Campus, Howard Eichenbaum, a College of Arts & Sciences professor of psychology, is planning for no undergraduate hires, and possibly no new graduate student or postdoctoral fellows, for his studies of how memories are retrieved and processed, with its implications for future dementia treatments.

Those are just two snapshots of academic life on the eve of sequestration, the agreement between President Obama and Congress to make automatic, across-the-board spending reductions if the two fail to agree to a deficit-erasing plan.

In the 2012 fiscal year, federal dollars paid for 90 percent of the $362.5 million in sponsored research spending at BU, according to Andrew Horner, associate vice president for financial affairs. (“Sponsored” research is any funded by a non-University source.) Horner says the rest of the funding came from foundations, industry, the state and city, and the University, which covers researchers’ overhead out of its own revenue.

As for whether BU could tap other sources, from tuition to private gifts, to cover at least some of the lost federal money, Provost Jean Morrison is blunt: “Absolutely not. The loss of federal revenue cannot be made up elsewhere.”

While we know that sequestration will cut domestic spending 5.1 percent, University officials say the bottom-line hit to BU research is hard to predict, because different federal agencies have varying abilities to adjust the rate at which they impose their cuts. For example, the National Institutes of Health accounted for the most ($209 million) federal research money received by BU last year. But the NIH has 27 institutes, and each one will make cuts at its own discretion, says Jennifer Grodsky, the University’s vice president for federal relations. Depending on the federal funding source, Grodsky says, cuts to BU research grants could range between 5 percent and 10 percent.

Horner says damage from cuts will be lessened if Washington rescinds the sequester quickly. “If they come to the deal relatively quickly,” he says, “the impact would be much lower than if it lasted into April, May, and beyond.”

Grodsky says that because other revenue sources, like tuition, are needed for vital operations, “such as educating students,” the University will be unable to cover the federal cuts.

“All of our revenues are spoken for,” says Horner. “We’re a nonprofit institution, and we’re trying to balance the budget on an annual basis.”

Nor can money from BU’s $1 billion comprehensive fundraising campaign cover any shortfall, as donors, not the University, have discretion on how to spend that money, says Scott Nichols, senior vice president for development and alumni relations. “There is very little wiggle room in terms of directing money. Virtually every big donor we have knows exactly what they want to support. Certainly, the campaign strengthens the University’s finances; there is support coming in for research, but it’s for particular projects” specified by donors.

In fiscal year 2012, MED had $140 million in sponsored research expenses, more than any other University school. Karen Antman, dean of MED and provost of the Medical Campus, says the inability of Congress and the White House to agree on a current year budget—the nation is running on a “continuing resolution” that holds spending to last year’s levels—gummed up the research works even before sequestration.

“Federal agencies, such as the NIH, are already being very conservative with spending, because of their uncertain budgets,” says Antman, and funding agencies have withheld grants already awarded the University and delayed decisions on new grants. “We are already slowing important research,” she says. “We are letting laboratory staff go and accepting fewer graduate students, who are the future of innovation.…Research is not like a light switch that can be easily turned on and off. Cuts like these have a devastating impact to the future of health care. We will lose the next generation of leaders in science and medicine.”

Medical schools and teaching hospitals like MED-affiliated Boston Medical Center will be disproportionately affected, according to Antman, because they conduct more than half the research paid for by the NIH. Those studies have “the potential to change our lives,” she says. “We have people looking at the impact of pollution on human development, researchers trying to grow lung cells in order to combat cystic fibrosis, and people figuring out how the body can combat antibacterial-resistant infections.”

Eichenbaum, whose memory research receives almost $25 million in federal funding, mostly from the NIH, says he’s been told to anticipate that one-tenth of that will disappear. He says the types of lab layoffs that MED is imposing “would be a last resort,” one that he would avoid if possible by attrition of student assistants and not hiring new ones.

Coleman oversees about 250 researchers across 3 centers and 16 department sections, and their research attracts more than $100 million a year, 80 percent to 90 percent of it coming from the federal government. “We do not anticipate furloughing investigators unless the sequester lasts more than a few months,” he says. “We are, however, quite concerned about the ability of new investigators to launch their respective careers,” especially when their proposals would qualify for grant money that’s being withheld.

Grodsky says she is optimistic that the University will weather the sequester. “Our faculty are extraordinarily entrepreneurial” in devising and managing their projects, she says. “Even in difficult circumstances, they tend to do really, really well.”

That resilience notwithstanding, Morrison sees a rougher road ahead. Sequester or no sequester, she says, “the long-term outlook for federal funding for the research enterprise, given our national debt and deficit, is not rosy.” And Brown, citing an inevitable drop in funding in his State of the University letter this week, announced plans to eliminate administrative redundancies, review academic programs for quality and impact, and make “difficult but necessary decisions” to scale back some of them.